It might not be immediately apparent, but mediators and air traffic controllers share similar missions. Both receive, process and evaluate real-time data and then transmit critical information to others, providing the guidance those others require to reach a particular destination. Every now and then, that guidance may include recommending an alternate route.
Several years ago, I mediated a dispute in which plaintiff’s claim arguably exceeded the policy limit, but the parties disagreed as to whether plaintiff had taken the steps necessary to “open” the policy. To its credit, defendant’s insurance carrier — without conceding liability — had agreed to attend the mediation with settlement authority in excess of the underlying $500,000 policy limit.
Based on my pre-mediation calls with the attorneys, I was concerned that plaintiff and his counsel had higher expectations than were likely to be met. Despite having agreed to attend the mediation with authority in excess of the policy, the carrier felt strongly that the policy was not “open.” Moreover, defense counsel was convinced there were strong defenses to the underlying claim.
Unless plaintiff presented an opening demand that the carrier considered reasonable, the parties were likely to experience quite a bumpy ride and I feared that things could easily spiral out of control. I concluded that a different approach was necessary.
Given my concerns, I decided to suggest that the parties engage in “blind” settlement negotiations, disclosing their opening and subsequent demands and offers to me with the understanding that I would not share any demand or offer until the gap separating the parties was $200,000 or less, which I considered a perfect-sized “runway” for the parties to then engage in negotiations directly. Following considerable discussion, and despite their expressed qualms, both sides agreed.
Next, I separately asked counsel for plaintiff and counsel for the carrier to write down their respective opening demand/offer on a piece of paper, fold the paper in half so that I couldn’t see the number, and hand it to me.
After reviewing the opening demand and opening offer in private, I returned and informed each side that the gap separating the parties was greater than $200,000. I requested that both sides write down a “better” demand/offer, which they did. The gap was still more than $200,000, so I returned and requested yet another demand/offer — with the same result. And so on and so on.
The eighth time that I returned and requested another “offer,” counsel for the carrier informed me that he was going to write down his “final” offer because he had no more settlement authority. Unfolding the carrier’s “final” offer and comparing it to plaintiff’s current demand, I discovered that the parties were still more than $200,000 apart.
Given that counsel for the carrier had exhausted his settlement authority, I decided to ask both sides for permission to disclose their current demand/offer, despite the original agreement that I would not do so unless and until the parties were $200,000 apart or less. Again, both sides agreed.
I informed both sides that plaintiff’s current demand was $900,000 and that the carrier’s “final” offer was $675,000 — a difference of $225,000. Though larger than the “runway” I originally envisioned, the difference was still small enough for the parties to pilot the rest of the negotiations on their own.
To his credit, counsel for the carrier offered to make a call and immediately obtained an additional $25,000 in settlement authority. Counsel for plaintiff requested additional time to consider the offer. One week later, I was informed the parties had reached a resolution.
Despite flying blind, the parties had successfully navigated their way to a perfectly smooth landing. Best of all, they encountered virtually no turbulence along the way.
As always, it would be my pleasure to assist you and your clients in the dispute resolution process. Please don’t hesitate to contact me if I can be of service.
Wishing you and yours a very happy holiday season!
Best regards,
Floyd J. Siegal